Our debt is now below our target range – so in addition to the investments we’re making in customers and our people, we’re in a position to start repaying shareholders.
People are not just flying again – they’ve brought a level of enthusiasm for travel beyond our best projections. Our partners – including ground handlers and airports – are recruiting as well. We’re reducing our domestic flying – in part – to give us more buffer.
Forward bookings are extremely strong across our airlines. Consumer research shows that travel is one category people want to keep spending on, even as inflation and interest rates pull them back elsewhere.
Cancellations reached 7.5 per cent in July but fell below 5 per cent in August and will be back to pre-COVID levels in September.
Revenue intakes for leisure travel are around 125 per cent of pre-COVID levels. We’re setting aside almost $200 million for a non-executive recovery boost of $5,000 and 1,000 Qantas share rights, worth roughly another $5,000.
Today we’re announcing Qantas will start flying from Auckland to New York with our 787 Dreamliner, starting from June next year.
I’d like to acknowledge the Traditional Custodians of the land, the Gadigal people of the Eora Nation, and pay my respects to Elders, past, present and emerging.
We’re also investing more in technology, including an upgrade to our airport kiosks and bag drop facilities and new scanners at boarding gates.
Today we’re announcing a major improvement to those benefits, including better access for family members and expanding the already significant fare discounts. We know how tough the pandemic has been on our people. Since April, we’ve hired more than 1,500 people and will add more in the next few months.
Our training pipeline has never been busier, and today we’re officially opening our new cabin crew training centre in Mascot.
It was incredibly tough for our people and deeply frustrating for our passengers. Now that we’re moving back to profit, we want to share the benefits of the recovery. There’s a lot of work in Qantas to prepare for these aircraft.
Freight posted another record result in FY22, and while international yields are coming down, we believe the market has undergone a structural shift.
Today we announce several more investments for our customers, starting with improvements to our lounges. We knew the recovery was coming, and we were ready for the restart.
Qantas’ mishandled bag rate reached 11 in every one thousand in July, but it’s now down to 6 in one thousand.
Today we have released our results for the financial year 2022. This resulted in well-publicised problems: long queues, delayed flights and misplaced bags.
Last month, the first of the Group’s next-generation narrow-body aircraft arrived in Jetstar. Now, our flights are full, and we can’t bring aircraft out of storage fast enough. A lot of work is happening to get Qantas back to its best. We reached out to our Frequent Flyers earlier this week to thank them for their patience and for sticking with us.
Twelve months ago, almost all of Australia’s borders were closed. Before COVID, Australia lagged most of the world in e-commerce, but lockdown saw our catch-up. Internationally, our Auckland lounge will be completely upgraded. It simply wasn’t good enough, so we have apologised. There’s a significant improvement already. Qantas Loyalty is also growing.
For business travel, it’s 90 per cent – despite the fact many people are still working from home during the current COVID and flu spike. It’s fair to say this has been an extremely challenging time for the Qantas Group, our people, and – unfortunately – our customers. What we weren’t ready for – after 18 months of COVID being suppressed – was such high levels of community transmission and the sick leave that followed.
This depends on some factors out of our control – like extreme weather events or air traffic control – but the operation will be much more robust overall. Since Australia’s borders opened last November, our teams have been working hard to restart our international network and meet the demand for new ones – like Perth-Rome, Sydney-Seoul and Melbourne-Delhi. But they also show how quickly and strongly the recovery is now happening. That’s still not good enough, and we expect it in the mid-70s, or higher, in September – on its way back to pre-COVID levels of 80.
That brings our losses since the start of the pandemic to more than $7 billion and takes lost revenue to more than $25 billion. At a headline level for FY22, the Group had an underlying loss before tax of almost $1.9 billion and a statutory loss before tax of just under $1.2 billion. We are rostering more crew across fewer flights, which means we can better cover sick leave that is averaging almost 50 per cent above normal. Of course, that shortage has been more acute in aviation because of how many people left the industry during two very uncertain years.
Since the start of the pandemic, it’s added over 1 million new members. These aircraft can fly further, carry more people, generate less noise and burn less fuel. Our people are incredibly excited, and we think our customers will love them. Early on, they supported us with $1.4 billion to help fund our recovery program, which was on top of the billions we borrowed to get through this crisis. That’s almost back to pre-COVID levels and will be at pre-COVID levels in September.
From the start of the pandemic, our focus has been restructuring the business so we can get back to profit and back to investing. This is the start of a 10-year fleet renewal program that will also see Qantas update its 717 and 737 fleets with the Airbus A220 and A321. On-time performance was 52 per cent and is now 66 per cent. While passenger flying has only come back in the past six months, Qantas Freight and Qantas Loyalty have been standout performers throughout the pandemic.
In line with our financial framework, I’m pleased to say that the Board has approved shareholder returns of up to $400 million in the form of an on-market share buyback. Sales in the first month were up 70 per cent, and Frequent Flyers have so far redeemed 150 million points on TripADeal packages.
Domestically, we’ll add a new Business Lounge to our existing Qantas Club in Adelaide and renovate our Chairmans Lounge. We’re also investing heavily in our people. International travel felt like a very distant prospect. Those goods ordered online are filling our aircraft, which is why we’re investing in expanding our freighter fleet. It’s something we know our people value. The rebound in travel demand also coincided with a massive labour shortage. To put that in perspective, on a statutory basis, COVID cost us more money in the past three years than we made in the five years before that.
Written by: Jill Walsh
